New funds in focus: Franklin India Long Duration Fund, Edelweiss’s AAA Financial Services Index Fund; check details

NFO alert: Franklin Templeton India has introduced the Franklin India Long Duration Fund (FILDrF), a debt fund that caters to long-term investments. This open-ended fund is suitable for investors with a time horizon exceeding three years and will mainly invest in government bonds, corporate bonds, as well as money market instruments such as treasury bills and certificates of deposit.

The New Fund Offer (NFO) for FILDrF commenced on November 20, 2024, and is scheduled to conclude on December 4, 2024. Throughout the NFO period, units are available at a fixed price of Rs 10.

Following the closure of the NFO on December 4, 2024, the fund will resume regular transactions. FILDrF aims to sustain a Macaulay duration extending beyond seven years to meet its investment objectives.

Chandni Gupta, Vice President & Portfolio Manager, India Fixed Income, Franklin Templeton, said, “The fund focuses on a diversified portfolio of sovereign and high-grade corporate bonds with conservative credit management. It employs a tactical duration strategy to benefit from falling interest rates, offering potential capital gains.”

Anuj Tagra, Vice President & Portfolio Manager, India Fixed Income, Franklin Templeton, added “This fund suits investors willing to take on higher interest rate risk while keeping credit risk low. It emphasises portfolio liquidity and aims to deliver superior risk-adjusted returns through accrual income and potential capital gains.”

Key benefits

Minimum Investment: Rs 5,000 for fresh purchases, Rs 1,000 for additional purchases.

SIP: Starting at Rs 500 per month.

Exit Load: None.

Benchmark: CRISIL Long Duration Debt A-III Index.

The fund targets income generation and capital appreciation through long-term investments in debt and money market instruments.

Avinash Satwalekar, President of Franklin Templeton India, said: “This strategy focuses on high-quality credit backed by disciplined investment and risk management. It caters to both individual and institutional investors seeking asset class diversification,” he said.

Franklin Templeton, one of India’s prominent international asset management firms, operates a range of mutual fund schemes. As of October 31, 2024, the company manages $1.63 lakh crore in assets worldwide and provides specialized knowledge in various asset categories.

Edelweiss CRISIL IBX AAA Financial Services – Jan 2028 Index Fund 

Edelweiss Mutual Fund has floated a new debt index fund, named Edelweiss CRISIL IBX AAA Financial Services – Jan 2028 Index Fund. The New Fund Offer (NFO) will be available for subscription from Thursday, November 21 to November 26, 2024.

This fund aims to mirror the performance of the CRISIL IBX AAA Financial Services – Jan 2028 Index by primarily investing in AAA-rated corporate bonds issued by financial services entities maturing by January 2028. As an open-ended target maturity fund, its focus is on providing investors with a low credit risk profile and reliable returns, with consideration of tracking errors.

Investors redeeming units within 30 days will be subject to an exit load of 0.10%. However, redemptions made after 30 days will not incur any charges. The fund enables daily liquidity, allowing investors to buy, switch, or redeem units based on NAV prices on business days. Redemption proceeds will be processed and dispatched within three working days. The fund has a higher interest rate risk, but it maintains low credit risk by concentrating solely on AAA-rated securities.

Key features:

The minimum subscription amount for the fund is set at Rs 100, ensuring accessibility to a wide range of investors. 

The fund provides daily liquidity, allowing investors to buy, switch, or redeem units at NAV-based prices on business days. Redemption proceeds are processed within three working days.

Although the fund carries a relatively high-interest rate risk, it maintains low credit risk by focusing exclusively on AAA-rated securities. 

The fund offers a Regular Plan and a Direct Plan for direct investments with the fund house. Both plans offer two options: Growth option and Income Distribution – Capital Withdrawal (IDCW) with reinvestment, payout, and transfer facilities.

During the NFO period, the units are priced at Rs 10.